In a Strategic Update Meeting on Tuesday, Steve Ballmer discussed all things Windows Mobile; its current market position, its standing within Microsoft and its future. Microsoft confirmed that Windows Mobile is one of its core seven businesses with 2,000 dedicated employees and nearly a billion dollars in yearly operating expenses. According to Ballmer, Windows Mobile is trailing both Symbian and RIM in market share and is considered “somewhat unprofitable” within the company. Windows Mobile also sees stiff competition from Apple and Android which currently have momentum on their side. Despite the extremely competitive market and the economic downturn, Ballmer is confident that Windows Mobile will remain strong because of the low price point of some Windows Mobile devices and the fact that Windows Mobile has, unlike Android, a positive price for its software (i.e., its not free and open source).
Ballmer also dispelled the ever-persistent “Zune phone” rumor by reasserting yet again that Microsoft will not manufacture its own phone. Unlike Apple and RIM which provide end-to-end solutions, Microsoft will remain focused on the software side of the business, producing a platform that can run on different devices and different carriers. According to Ballmer, the Windows Mobile platform will see an improvement with 6.5 this year and will get another boost next year when Windows Mobile 7 is expected to make its debut. Ballmer emphasized the idea of “synergy” between Windows and Windows Mobile by stating, “There will be really shared technology across Windows and Windows mobile. The browser is an example, the presentation surface is an example. Some day even the kernel will be an example.” Sounds interesting – let’s hope Microsoft can pull it together and wow us next year because 6.5 just isn’t quite exciting enough to reel us back in.